This paper examines the implications of regulatory change for input mix and technology choices of regulated industries. We study the increase in the relative price of labor faced by U.S. hospitals that resulted from the move from full cost to partial cost reimbursement under the Medicare Prospective Payment System (PPS) reform. Using the interaction of hospitals' pre-PPS Medicare share of patient days with the introduction of PPS, we document substantial increases in capital-labor ratios and declines in labor inputs following PPS. Most interestingly, we find that PPS seems to have encouraged the adoption of a range of new medical technologies.

We use a unique data set of annuities in the United Kingdom to test for adverse selection. We find systematic relationships between ex post mortality and annuity characteristics, such as the timing of payments and the possibility of payments to the annuitant's estate. These patterns are consistent with the presence of asymmetric information. However, we find no evidence of substantive mortality differences by annuity size. These results suggest that the absence of selection on one contract dimension does not preclude its presence on others. This highlights the importance of considering detailed features of insurance contracts when testing theoretical models of asymmetric information.

We develop a set of frameworks for welfare analysis of Medicaid and apply them to the Oregon Health Insurance Experiment, a Medicaid expansion for low-income, uninsured adults that occurred via random assignment. Across different approaches, we estimate recipient willingness to pay for Medicaid between $0.5 and $1.2 per dollar of the resource cost of providing Medicaid; estimates of the expected transfer Medicaid provides to recipients are relatively stable across approaches, but estimates of its additional value from risk protection are more variable. We also estimate that the resource cost of providing Medicaid to an additional recipient is only 40% of Medicaid's total cost; 60% of Medicaid spending is a transfer to providers of uncompensated care for the low-income uninsured.

We study the introduction of a noninvasive prenatal screening—cell-free DNA (cfDNA) screening—which is used to target a more costly invasive test that elevates miscarriage risk. Using Swedish administrative data, we document that coverage of cfDNA substantially increases cfDNA screening and reduces invasive testing. We develop and estimate a stylized model of prenatal choices and find that narrow targeting of cfDNA coverage can improve outcomes and reduce costs, while broader coverage also improves outcomes but with increased costs. These findings point to the potential gains from well-designed targeting of screening but at the same time highlight the importance of the targeting design.